China called to join IEA: report

China's CNOOC profit plunges 34 percent on lower oil prices
Hong Kong (AFP) March 31, 2010 - CNOOC Ltd., China's biggest offshore oil and gas producer, said Wednesday that its profit plunged 34 percent last year as it was hammered by low oil prices combined with higher operating costs. The company reported its net profit in 2009 was 29.49 billion yuan (4.34 billion US dollars), down from 44.38 billion yuan in 2008 when the energy giant was riding high on soaring oil prices. Revenue fell 16.5 percent to 105.2 billion yuan, down from 125.98 billion yuan in 2008, China National Offshore Oil Corporation said. "2009 was an unusual year in the history of the company. The aftermath of the international financial crisis, the drop in oil prices and the continuing high costs in the industry all caused great difficulties for the company's operations," CNOOC said in a statement posted on its website.

The firm said its average selling price for oil in 2009 tumbled 32.2 percent to 60.61 US dollars a barrel. Oil production in 2009 increased 17.2 percent to 227.7 million barrels, it said. CNOOC said operating costs soared 25 percent year-on-year to 12.49 billion yuan, stemming from expenses related to new oil and gas production as well as equipment upgrades. A recovery in China would help boost the company's fortunes in 2010 although any upswing could be tempered as the company worked to shrink its high operating expenses, CNOOC said. "In 2010, the Chinese economy is expected to be an important force in leading the recovery of the global economy. However, such recovery may be slow and uneven," it said. "Moreover, the budding inflation will add uncertainties to the environment of the company's operations. The oil and gas industry's costs may remain high."

by Staff Writers
Cancun, Mexico (AFP) March 31, 2010
China has been called on to join the International Energy Agency, the head of the developed world's energy policy advisory body said Tuesday in the Financial Times.

"In many ways they (the Chinese) are already working closely with us. But eventually we wish they would join us," IEA chief Nubuo Tanaka told the FT.

Part of the OECD network, the IEA offers advice on energy policy to developed nations including Britain, France, Germany, Japan and the United States, who account for most of global economic output.

"Our relevance is under question because half of the energy consumption already is in non-Organisation of Economic Cooperation and Development countries. And for oil it is soon coming that the majority of consumption is happening in non-OECD countries," Tanaka said, according to the report.

The IEA executive director was in the Mexican beach resort of Cancun for the biennial International Energy Forum (IEF), where two days of talks have centered on the future for fossil fuels amid increasing use of renewable energy sources.

Earlier this month the IEA reported that China is experiencing "astonishing" growth in oil demand this year to match its economic rise, while the agency also warned consumption in developed economies was falling.

China's demand surged in January by 28 percent on a 12-month comparison and raised its forecast for global demand in 2010 to 86.6 million barrels per day (mbd) from its projection last month of 86.5 mbd.

That forecast was 1.8 percent higher than 2009 demand levels.

"China is currently expected to account for almost a third of global oil demand growth in 2010," said the report.

By contrast, OECD demand remained "persistently weak" and would fall by 0.3 percent this year, the IEA said.

The IEA also said it had cut its estimate of global oil demand this year by about 270,000 barrels a day from its estimate last month.

The Financial Times said Tuesday that IEA member countries have been working their diplomats to coax China into joining and could even reconfigure the agency's constitution if needed. China has not voiced intention to apply for IEA membership.

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